GBP/AUD - Dominant Trend Reversal & Fibonacci Synchronicity

FX:GBPAUD   British Pound / Australian Dollar
The GBP/AUD             pair has endured a powerful bear market since 2001, however, many correlating indicators are suggesting that we may be close approaching a confirmed pivotal change in the dominant trend.

Our first major indicator was the cross of the 50/200 Exponential Moving Averages which occurred in January of 2014. The last time these indicators crossed was back in the summer of 2003 following a massive monthly head & shoulders pattern in 2001 at 2.95000. This "Death Cross" contributed to the acceleration of the bear market following the H&S topping pattern.

We are currently witnessing an identical inverse scenario taking place as we transition into a powerful bull market. Taking a closer look we can see a 2 year descending triangle reversal pattern that formed from April 2011 - April 2013 with 1.4750 acting as the floor. Following the breakout of this impressive reversal pattern, we can take note of the 50/200 EMA "Golden Cross". Remember, the last cross of these EMA's was back in 2003; a solid 10.5 years ago. We have remained in a bull market ever since the most recent "Golden Cross"

The recent price action has been exceptionally bullish ; with this pair currently reflecting a massive bullish channel . This channel developed following a complex ABC pullback pattern that occurred after the "Golden Cross"; re-testing the 200 EMA as new support.

Coming up to speed with last week, we had a massive bullish pinbar form at the key Support/Resistance level of 1.9000. This level acted as major resistance at the end of January 2014 which kicked off the ABC Pullback Pattern. We have now re-tested that 1.9000 level as support with a bullish pinbar that is indicating a new leg higher in this bull market.

Utilizing our Fibonacci Tool, we are able to measure and identify that each new bullish drive off the bottom trend-line of the channel has occurred at the .618 Fibonacci Retracement of the previous up-move. Price then went on to target the 1.618 Fibonacci Extension with 100% accuracy.

Keeping this in mind, the textbook price action of the last weekly pullback that ended with a pinbar reversal candle, point to the high-probability of the next bullish wave targeting the 1.618 Fibonacci extension at 2.07500. What makes this target even more appealing is the fact that the 50% Fibonacci Retracement of the last bearish leg down (measuring from the previous swing high at 2.7000 to the descending triangle lows) lies exactly at the 1.618 weekly extension at 2.07500. If this target is reached, broken, and re-tested as new support, this opens up the .618 Fibonacci retracement @ 2.22500 as Target 3.

Last week's bullish pinbar provides us with the proper technical signal to enter a long position on GBP/AUD             with 3 logical upside targets. Target 1 being the previous key resistance at 2.000 which triggered the most recent bearish pullback. Target 2 is our 1.618 weekly Fibonacci extension as outlined above. Target 3 is the .618 Fibonacci retracement of the previous bearish leg.

Great analysis! How do you attribute the Aussie's correlation with gold into this forecast?
Hey Paul, IP & AT student here.
First i want to thank you and Tom for all the effort and time you put into making us better traders, i know we all appreciate it a whole lot!

This is an amazing analysis as usual, which lines up perfectly with my own views, although i didn't catch an opportunity to enter yet.
One remark though. In the sentence: 'Remember, the last cross of these EMA's was back in 2003; a solid 10.5 years ago. We have remained in a bull market ever since. '
I think you meant to say that it has been a 'bear' market, like you mentioned before and not a 'bull' market.

Anyway, looking forward to the weeks ahead, as i'm sure this will be very interesting times for the markets!
anton.everaert anton.everaert
(No idea how to edit my comment, so i'll just reply again)
You already edited the sentence, which apparently i misunderstood.
Thanks for clearing it up anyway!
Couldn't have timed my intraday entry better on this. Talk about maximising return!
+1 Reply
ActiveTrader PRO MoneyForJam
@MoneyForJam BOOM!! Excellent job!! Keep holding this baby for the long-term!
+1 Reply
This setup might be the one that'll finally clear up for me how to use multiple timeframe analysis once and for all.

Through this A++ weekly setup, I realized:

- A breakout and retest on daily (that I'm waiting for in this setup) = a lower timeframe retrace, which ≈ the retraces I look for in intradays when I see an A++ daily.

- And then when (if) I get the daily retrace that I'm looking for in this setup, I'll be looking for an intraday retrace!

- It's like a fractal, a box in a box in a box, a Russian nesting doll, or looking at a mirror in another mirror!!


The combination of this weekly setup, the discussions we've had over this setup in the community, Active Trader, and day trading has given yet another huge breakthrough! I think I understand how to place entries using multiple timeframe analysis now!



BTW, Paul (or Tom), in the event of the price action just running away without retesting 1.90000 - 1.91000, do you just plan on missing this setup?
Super, al always Paul. In this trade and already at 3-4%. Really like your trade management lessons which learn me to be more patient.
+1 Reply
Boom!! That is great to hear @bblancke!! Plenty more reward to come on this one ;)! Thank you for the continued support!
I love doing my own detailed analysis and comparing it to yours. When there's a post from you a few days afterwards, I can see what I overlooked or what I got wrong in my analysis. There's always room for improvement, and seeing your analysis is a huge help in identifying gaps in my performance.
So keep up the good work bro, this is huge! Thank you for all the effort you put into our education!
+1 Reply
ActiveTrader PRO AdrianWolfFX
@AdrianWolfFX Thank you for the continued support!
+1 Reply
EN English
EN English (UK)
EN English (IN)
DE Deutsch
FR Français
ES Español
IT Italiano
PL Polski
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 简体中文
ZH 繁體中文
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Contact Support Ideas Published Followers Following Private Messages Chat Sign Out